Austria says will start 'conflict' in EU about Canada trade deal

VIENNA (Reuters) - Austria is ready to confront other European Union members states over its opposition to a free trade deal with Canada, Chancellor Christian Kern said, because it sees it containing many of the same problems as one being negotiated with the United States.

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Austria opposes a proposed free trade deal with the United States, and Kern said the deal with Canada, called the Comprehensive Economic and Trade Agreement (CETA), had many of the same problems.

“This will be difficult, this will be the next conflict in the EU that Austria will trigger ... We must focus on making sure ... we don’t shift the power balance in favor of global enterprises,” Kern told broadcaster ORF late on Wednesday.

According to a recording broadcast by ORF radio on Thursday, European Commission head Jean-Claude Juncker told Austria in June to stop its “clownery” around CETA, calling it the best trade agreement reached by the EU.

One diplomat in Brussels, who is in favor of finalizing CETA by the end of the year, said it would have “a disastrous effect on the credibility of the EU’s trade policies” if CETA fell through.

“No one would ever again engage in years of negotiations with us to see it all go south the last minute. With all the mess around TTIP, we must deliver CETA,” the person said.

Trade ministers from Germany and France have also called for a halt in negotiations on the EU-U.S. deal, the Transatlantic Trade and Investment Partnership (TTIP).

German Foreign Minister Frank-Walter Steinmeier on Tuesday praised CETA.

“We shouldn’t fool ourselves (about TTIP). We are still far away from what we achieved in the CETA in terms of standards and procedures. It will be a yardstick that other trade agreements are measured against,” he told over 1,000 diplomats and business executives at a forum hosted by the Foreign Ministry.

Austria’s Kern is expected to address issues surrounding TTIP and CETA at a news conference on Friday.

“We will have to see where the weaknesses of (CETA) are. Many are the same as with TTIP,” Kern, a social-democrat, said, without elaborating.

Despite the German official support for CETA, activists in Germany on Wednesday lodged a complaint with the Constitutional Court with the aim of scuppering CETA.

There are widespread concerns in Austria that the TTIP could compromise food safety standards. Kern also opposes the idea that the agreement could allow companies to challenge government policies if they feel regulations put them at a disadvantage.

The European Commission hopes that the governments of the EU states can approve the trade deal before a planned EU-Canada summit at the end of October. The European Parliament would also need to vote to allow it to enter force provisionally next year.

But national, and some regional, parliaments would still need to ratify it.

Reporting by Shadia Nasralla, Gabriela Baczynska in Brussels, Andrea Shalal in Berlin; Editing by Alison Williams